Ad Hoc Shrimp Trade Action Comm. v. United States, Slip Op. 17–27

• Decision Date: 16 March 2017
• Docket Number: Slip Op. 17–27,Court No. 15–00279
• Citation: 219 F.Supp.3d 1286
• Parties: AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

219 F.Supp.3d 1286

AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 17–27

Court No. 15–00279

United States Court of International Trade.

March 16, 2017

Roop Kiran Bhatti and Nathaniel Jude Maandig Rickard , Picard, Kentz & Rowe, LLP, of Washington, DC, argued for plaintiff. With them on the brief was Andrew W. Kentz .

Kara Marie Westercamp , Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Patricia M. McCarthy , Assistant Director. Of Counsel on the brief was James H. Ahrens, II , Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

OPINION

Kelly, Judge:

This action comes before the court on Plaintiff's motion for judgment on the agency record pursuant to USCIT Rule 56.2. See Mot. Pl. Ad Hoc Shrimp Trade Action Committee J. Agency R. Under USCIT Rule 56.2, Apr. 20, 2016, ECF No. 27 ("Pl. 56.2 Mot."); Mem. L. Support Pl. Ad Hoc Shrimp Trade Action Committee's USCIT Rule 56.2 Mot. J. Agency R., Apr. 20, 2016, ECF No. 27 ("Pl.'s Br."). Plaintiff (or "Ad Hoc Shrimp") challenges as unsupported by substantial evidence the Department of Commerce's ("Commerce") decision to use labor wage rate data from the Bangladeshi shrimp industry to value the labor factor of production in the final results of the ninth administrative review of the antidumping duty order on certain frozen warmwater shrimp from the Socialist Republic of Vietnam ("Vietnam"). See Pl.'s Br. 15–39; see generally Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Final Results of Antidumping Duty Administrative Review, 2013–2014 , 80 Fed. Reg. 55,328 (Dep't Commerce Sept. 15, 2015) ("Final Results ") and accompanying Issues and Decision Memorandum for the Final Results, (Sept. 8, 2015), ECF No. 18–2 ("Final Decision Memo"); Frozen Warmwater Shrimp from the Socialist Republic of Vietnam , 70 Fed. Reg. 5,152 (Dep't of Commerce Feb. 1, 2005) (amended final determination of sales at less than fair value and antidumping duty order) ("Order ").

For the reasons that follow, Commerce's final determination is remanded for Commerce to clarify or reconsider its practice for determining whether a surrogate country's labor data is aberrational and to clarify or reconsider its use of Bangladeshi labor data in this review, despite record evidence that the data is from an industry affected by alleged labor abuses.

BACKGROUND

In April 2014, Commerce initiated the ninth administrative review of the Order for the period February 1, 2013 through January 31, 2014. See Initiation of Antidumping Duty Administrative Review and Request for Revocation in Part , 79 Fed. Reg. 18,262 (Dep't of Commerce Apr. 1, 2014) (initiation notice); see generally Order , 70 Fed. Reg. at 5,152. As Commerce does when conducting an antidumping duty ("ADD") administrative review of a nonmarket economy ("NME") country,¹ Commerce invited interested parties to comment on the six potential surrogate countries Commerce had identified from which it would select the primary surrogate country and the data to value the factors of production ("FOP") used to produce the subject imports. Certain Warmwater Shrimp from the Socialist Republic of Vietnam: Request for Surrogate Country and Surrogate Value Comments and Information, PD 272, bar code 3233128–01 (Oct. 3, 2014), ECF No. 60–1.

On March 9, 2015, Commerce published its preliminary results. See Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam , 80 Fed. Reg. 12,441 (Dep't Commerce Mar. 9, 2015) (preliminary results of ADD administrative review; 2013–2014) ("Prelim. Results ") and accompanying Decision Memorandum for Preliminary Results of Antidumping Duty Administrative Review, A–552–802, (Mar. 2, 2015), available athttp://ia.ita.doc.gov/frn/summary/vietnam/2015–05474–1.pdf (last visited March 13, 2017) ("Prelim. Decision Memo"). After considering comments from interested parties on surrogate country and surrogate values, Commerce selected Bangladesh as the primary surrogate country for purposes of valuing the mandatory respondents' FOPs for the preliminary results. See Prelim. Decision Memo at 12–17. Regarding the labor factor of production, Commerce explained its practice to value the labor input using industry-specific labor wage rate data from the primary surrogate country, and accordingly chose to use Bangladeshi labor wage rate data to value the labor input. Id. at 26–27. Commerce explained that, although it considers the International Labor Organization ("ILO") Yearbook of Labor Statistics Chapter 6A: Labor Cost in Manufacturing ("ILO Chapter 6A data") to be the best source of data for industry-specific labor rates,² because the ILO does not include labor data for Bangladesh, Commerce would use labor wage rate data for the shrimp industry published by the Bangladesh Bureau of Statistics ("BBS"), a Bangladeshi government source. Id. at 26; Antidumping Duty Administrative of Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Surrogate Values for the Preliminary Results, A–552–802, at 6, PD 504, bar code 3262270–01 (Mar. 2, 2015), ECF No. 56–6 ("Prelim. Surrogate Value Memo").

On September 15, 2015, Commerce published its final determination. Final Results , 80 Fed. Reg. at 55,328. Commerce continued to use Bangladesh as the primary surrogate country, see id. at 55,330 ; Final Decision Memo at 46–48, and, over objections by Ad Hoc Shrimp, continued to use Bangladeshi shrimp industry labor wage rate data to value the labor factor of production. Final Decision Memo at 46–55; Antidumping Duty Administrative of Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Surrogate Values for the Final Results, A–552–802, PD 574, bar code 3303461–01 (Sept. 8, 2015), ECF No. 56–15; see Ad Hoc Shrimp Trade Action Committee Case Brief at 1–37, Jun. 8, 2015, PD 563, bar code 3282504–01 ("Ad Hoc Shrimp Admin. Case Br.").

Plaintiff challenges Commerce's decision to use Bangladeshi shrimp industry labor wage rate data to value the labor FOP. It contends that the Bangladeshi data is aberrational as it is influenced by labor abuses, including forced and child labor, throughout the Bangladeshi shrimp industry and is therefore an unreliable basis for valuing the labor FOP. See Pl.'s Br. 15–35; Pl. Ad Hoc Shrimp Trade Action Committee's Reply Mem. R. 56.2 Mot. J. Agency R. 4, 14, Oct. 28, 2016, ECF No. 43 ("Pl.'s Reply"). Plaintiff argues that the use of this data renders the final results of the review unsupported by substantial evidence. See Pl.'s Br. 15–35; Pl.'s Reply 11–21. Defendant United States responds that the court should sustain Commerce's determinations in the final results, including Commerce's decision to use Bangladeshi labor wage rate data for the shrimp industry, as the determination is supported by substantial evidence. See Def.'s Resp. Opp'n Pls.' Rule 56.2 Mots. J. Agency R. 13–23, Sept. 28, 2016, ECF No. 42 ("Def.'s Resp.").³

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c) (2012),⁴ which grant the court authority to review actions contesting the final determination in an administrative review of an antidumping duty order. The court will uphold Commerce's determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

Plaintiff argues that Commerce's use of labor wage rate data from the Bangladeshi shrimp industry to value the labor FOP is unsupported by substantial evidence, an abuse of discretion, and arbitrary and capricious due to alleged widespread labor abuses in the Bangladeshi shrimp industry that render the data aberrational and unreliable. Pl. Br. 14–38. Defendant responds that Commerce's use of the Bangladeshi labor wage rate data to value the labor FOP is supported by substantial evidence and contends that Commerce reasonably determined that the Bangladeshi data is the best available information on the record, as the Bangladeshi data is neither aberrational nor unreliable. Def.'s Resp. 10. For the reasons that follow, the matter is remanded to Commerce to further explain, or reconsider, its decisions: 1) to forgo any comparison of Bangladeshi labor wage rate data to other labor wage rate data on the record, and 2) to use labor wage rate data from Bangladesh despite record evidence that such data was aberrational because of widespread labor abuses in the Bangladeshi shrimp industry.

Commerce determines the existence of dumping by comparing the normal value of the subject merchandise with the actual or constructed export price of the merchandise. 19 U.S.C. § 1677b(a). The normal value of the merchandise is the price of the merchandise when sold for consumption in the exporting country. 19 U.S.C. § 1677b(a)(1). However, when the exporting country is an NME country, the normal value may not reflect the fair value of the merchandise. See 19 U.S.C. § 1677(18)(A). As a result, Commerce calculates the normal value for subject merchandise from an NME country by valuing the NME country's FOPs⁵ "based on the best available information⁶ regarding the values of such factors in a market economy country or countries considered to be appropriate by the administering authority." 19 U.S.C. § 1677b(c)(1) ; see 19 C.F.R. §§ 351.408(a)-(c).⁷ Commerce selects as a surrogate for each FOP a market economy country that is economically comparable to the NME country and a significant producer of the merchandise in question. 19 U.S.C. § 1677b(c)(4)(A)–(B) ; 19 C.F.R. § 351.408(b).

Commerce has a regulatory preference to value all FOPs using data from a single surrogate country, 19 C.F.R. § 351.408(c)(2), and...